Is money no longer enough for you? With these measures you can protect yourself from prolonged inflation
Have you noticed that your money is worth less and less? Why can you now buy less with the same amount of money from a few years ago? Well, the answer is here for you, and it is that all this occurs as a result of inflation, the one that, according to an analysis by Moody's Analytics, is costing American families an average of $296 more per month.
According to the Labor Department, the figure is based on the latest reading of consumer prices, which rose 7.9% in February compared to a year ago. The steepest increase in 40 years.
In that sense, Ryan Sweet, the chief economist at Moody's Analytics and who did the analysis, stated that "the situation is going to get worse before it gets better."
The rise in inflation has already affected various people due to the increase in prices in all areas, although some more than others.
In that sense, according to an analysis of the Penn Wharton Budget Model, low- and middle-income American families spent approximately 7% more in 2021 on the same products they bought in 2020 or in 2019. By comparison, household spending rich rose 6%.
Similarly, an independent study by Wells Fargo showed that the middle-income family, in particular, is being squeezed. According to economists at the financial services company, inflation was half a point higher for middle-income consumers than for high- or low-income consumers in December. When broken down by race and ethnicity, Hispanics and Latinos have suffered the most from rising costs of living.
For these reasons, today we want to give you three tips to try to combat or counteract inflation:
1. Be strategic and plan
When shopping, you should have a meal plan for the week that is already set and prepared.
To avoid fast food and takeaway, using apps like Flipp are a great idea, as they display supermarket ads, helping you create a meal plan for the week where you can incorporate items that are on sale.
As for gasoline, it is best to be strategic in the use of your car. If you have to run an errand, do it in one trip and at a time when there is not much traffic.
2. Buy what you need
A discount store is the best option if you do not require an item from a specific brand. Buying items in bulk at a warehouse, like Costco or BJ's, can help you avoid future price hikes.
To compare prices, look at the unit price of a product, which is the cost per unit of a particular product. For example, canned goods may be priced per ounce and paper products may be priced per sheet or per foot. So even though a product may seem cheaper at first, it may not be the best deal because it has fewer units than a higher priced item.
Another great alternative is to use coupons in store and on websites. These can be obtained as part of a retailer's rewards program or from a credit card. Meanwhile, browser extensions like Rakuten and Honey automatically search for coupon codes and apply them on the spot.
3. Review your budget weekly
Since prices are constantly on the rise, it's a good idea to review and re-evaluate your budget on a weekly basis.
One way to reduce costs is to assess where the money is going and eliminate what is not needed, such as subscription services. You can also try to negotiate to reduce bills such as cable or car insurance.
For its part, the Department of Energy suggests saving this service by unplugging devices when not in use or using power strips with switches that allow you to completely turn off plugged-in products. If you do, you can save between 5% and 10% of your residential energy consumption. Turning down the heat can also help save money.
4. Be careful with credit card debt!
Going through tough times financially racking up credit card debt can be tempting, but avoid it at all costs!
Credit card interest rates are already high, averaging just over 16%, according to CreditCards.com. The Federal Reserve has already raised its benchmark interest rate and is expected to continue raising it and take more aggressive measures to contain inflation.
5. Take care of retirement savings
The worst thing people saving for retirement can do is stop setting aside money to help pay rising costs now.
Specialists insist that it is best to invest because in a few years everything will be twice as expensive and they assure that it is one of the ways that have been shown to fight inflation.
Sources: Telemundo31, Passive Management
Miami Daily
Author: Andrea Rausseo 7:03 am